7M Medicare Beneficiaries Will Reach ‘Doughnut Hole’
Seven million Medicare beneficiaries will reach the gap in Medicare prescription drug coverage known as the "doughnut hole" this year, according to a report released on Wednesday by the advocacy groups Institute for America's Future and New Jersey Citizen Action, the Newark Star-Ledger reports.
Under the doughnut hole provision of the standard Medicare prescription drug benefit, beneficiaries pay 100% of total drug costs between $2,250 and $5,100 per year. Medicare then covers 95% of drug costs beyond $5,100.
According to the report, the average Medicare beneficiary will reach the doughnut hole on Sept. 22 (Campbell, Newark Star-Ledger, 7/13). Average total drug costs per beneficiary for 2006 will be about $3,081, according to Jeff Cruz, a senior policy analyst at Institute for America's Future.
The report calls on Congress to increase benefits and authorize Medicare to negotiate lower drug prices with pharmaceutical companies. Cruz said the gap in coverage "should really be called 'the black hole,'" adding, "People who fall into the doughnut hole don't get out" (Layton, Bergen Record, 7/13).
Rep. Frank Pallone (D-N.J.) said, "We want Medicare to negotiate drug prices the way the [Department of Veterans Affairs] does."
Mohit Ghose, a spokesperson for America's Health Insurance Plans, said, "Citizen Action misuses older estimates of Medicare beneficiary spending before the program was implemented to create an artificial deadline of Sept. 22 during this election year." Ghose said a June report by PricewaterhouseCoopers shows that 3.4 million beneficiaries will reach the doughnut hole this year (Newark Star-Ledger, 7/13).
The report is available online. Note: You must have Adobe Acrobat Reader to access the report.